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The Return of Brazilian Demand

Oct. 10, 2018

The Brazilian economy is on track to expand by 1.8% this year, a downward revision from the International Monetary Fund’s (IMF) initial expectation of 2.3% in January.  This downward revision is due to lower than expected consumption, exacerbated by fuel strikes observed across the country, placing a halt on the transportation of goods.  As a result, refined product demand found pressure in May, particularly for gasoline and diesel with the former finding additional weakness in a preference for ethanol consumption due to higher fuel pricing.  We are beginning to see demand pick up yet again; however, a ...

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The Middle East Cleans Up

Sept. 20, 2018

The Middle East stands as the largest crude export region in the world with about 20 million b/d of outflows annually; however, what is perhaps less realized is its growth potential as a clean product export region.  We are beginning to see a fundamental change in the Middle East petroleum industry, with initiatives from government entities to diversify away from reliance on upstream revenues and towards a wider scope of product exports.  As a result, the Middle East has expanded refinery capacity to reach 9.4 million b/d as of the end of 2017 from just 8.4 ...

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The Rise and Fall of West African Crude

Aug. 9, 2018

West African crude supply has faced recent pressure due to aging oil fields in both Nigeria and Angola as well as pipeline constraints in the former; however, pressure is likely to be relieved in the second half of 2018 and moving into 2019.  According to JBC Energy, Total’s Kaombo project came online with an initial production capacity of 115,000 b/d, while a second FPSO is projected for 2019, bringing levels to 230,000 b/d.  Unfortunately, this will only provide a short-term boost to Angolan production through 2019 as chronic underinvestment in prior years will come to ...

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Conflict Shakes Middle East Exports

July 26, 2018

Saudi Arabia has announced a temporary halt on oil shipments via Bab el-Maneb with immediate effect after reports of two tankers attacked by Yemen’s Houthi militia surfaced mid-week.  It’s been reported that the two vessels were owned by Bahri (Saudi National Shipping Co.) and that no injuries or spills resulted from the incident.  Bab el Maneb separates Yemen and East Africa and is one of the largest shipping channels in the world, allowing Arabian Gulf petroleum exporters access to the Suez Canal and in turn the European market.  A halt of flows through this channel is sure to ...

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A Potential Monumental Shift

July 9, 2018

US President Trump criticized OPEC for the recent rise in fuel prices, citing that the US pays for defense for many of the groups’ members and therefore, OPEC should make an effort to increase crude supply to pressure global pricing.  Additionally, Iranian President Rouhani hinted at the idea that Iran could disrupt the flow of crude exports out of the Arabian Gulf, while an Iranian Revolutionary Guard commander explicitly stated "If they want to stop Iranian oil exports, we will not allow any oil shipment to pass through the Strait of Hormuz." 

A disruption of this magnitude would result in ...

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